Nonresident Owner Florida Rental Tax: The US Federal Basics

How is rent from a Florida property taxed when the owner is a nonresident alien?

The IRS states a default of 30%, or a lower treaty rate, for a nonresident alien where the income is not effectively connected with a US trade or business: "In general, income from real property located in the United States (U.S.) that is owned by a nonresident alien (NRA) is taxed at a 30% (or lower treaty rate) if it is not effectively connected with a U.S. trade or business."

Collection is by withholding: "The tax is generally withheld (NRA withholding) from the payment made to the foreign person." Publication 515 (2026) then gives the rule for computing the amount withheld: "You must withhold on the gross amount subject to chapter 3 withholding. You cannot reduce the gross amount by any deductions."

Those are two distinct rules: the second governs the withholding computation. What an owner's liability is ultimately figured on, which deductions are available, and whether the rent is effectively connected income at all, are separate questions for a qualified tax professional.

What does the IRC 871(d) election change?

It moves the income onto a net basis at graduated rates: "If an NRA makes the timely election, the NRA can claim deductions attributable to the real property income, and the NRA’s net income from real property is taxed at graduated rates." These pages do not say what makes an election timely, how it is made, or how it is revoked.

The election is described this way, with the IRS's own wording intact: "If an NRA owns or holds in interest in real property located in the U.S. and holds the property for the production of income, then the NRA can elect under Internal Revenue Code (IRC) 871(d) to treat all income from U.S. real property as effectively connected income with the conduct of a trade or business in the U.S." The same passage adds that "This includes income from rents …". Which regime produces a better result depends on facts only a qualified tax professional can examine.

What is Form W-8 ECI, and who receives it?

Form W-8 ECI is the certificate a foreign owner gives to the withholding agent or payer: "You must give Form W-8 ECI to the withholding agent or payer if you are a foreign person and you are the beneficial owner of U.S. source income that is (or is deemed to be) effectively connected with the conduct of a trade or business within the United States."

Where the IRC 871(d) election is in play, the form "is required to be given to any withholding agent or payer by the NRA in the first year the IRC 871(d) election is made and in any subsequent year when required." Providing it means the NRA is certifying "under penalties of perjury that the rental income is effectively connected income with a U.S. trade or business …" That certification belongs with a qualified tax professional. Flexway does not prepare or advise on the form, and takes no position on who the withholding agent is.

Which US return does the election require, and for how long?

It requires Form 1040-NR, and not only once: a nonresident alien who makes a valid election under IRC 871(d) to treat rental income as effectively connected income must file that return "for the year the election is first made and for every subsequent year until the election is revoked."

Form 1040-NR is the U.S. Nonresident Alien Income Tax Return, which the IRS lists among the returns a person may need to file if they "Were a nonresident alien engaged in a trade or business in the United States." These pages give no due date and describe no revocation procedure, so the calendar for any year belongs to a qualified tax professional.

What happens if the return is filed more than 16 months late?

Unless the IRS grants a waiver, deductions and certain credits become unavailable: "An NRA who does not file within sixteen (16) months of the original due date (without regard to extensions of time to file), is not permitted to claim deductions from gross income and is ineligible to claim certain credits, unless the IRS grants a waiver."

Two qualifiers there do real work. The sixteen months run "without regard to extensions of time to file", so an extension does not move the date the clock is measured from; and the consequence is conditioned on the absence of a waiver, which the IRS mentions without saying how one is sought. A qualified tax professional can review past years and advise on what to file and by when.

What is an ITIN, and who needs one?

An ITIN is a federal tax number for people ineligible for a Social Security number: "An ITIN is a 9-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes, but you aren’t eligible for a Social Security number (SSN)." The IRS test: "You need an ITIN if you have a federal tax purpose and you’re not eligible for an SSN."

Its scope is narrow: "An ITIN is issued by the IRS for federal tax purposes only." The IRS lists four things it does not do: "Qualify you for Social Security benefits or the Earned Income Tax Credit", "Provide or change immigration status", "Authorize you to work legally in the U.S.", and "Serve as identification outside the federal tax system". Whether a given owner has a federal tax purpose is for a qualified tax professional to determine.

Does FIRPTA withholding apply to rent?

The IRS attaches FIRPTA withholding to disposition rather than to the collection of rent: "The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding."

It also keeps the two regimes formally apart. Of NRA withholding it writes: "In referring to NRA withholding in this area, it does not include withholding done under section 1445 of the Internal Revenue Code, dealing with Withholding of Tax on Dispositions of U.S. Real Property Interests (FIRPTA) …" Renting and selling are addressed under different Code sections; a qualified tax professional can read both against an owner's plans.

Does this page cover Florida state or local taxes?

No. Everything above is United States federal tax as the IRS publishes it; Florida state and local taxes, and the local rules on how a property may be used, sit outside the sources used here.

In the 2025 Florida Statutes, Part II of chapter 83 (Residential Tenancies, ss. 83.40-83.683) provides that "This part applies to the rental of a dwelling unit" (§83.41), and one of the five exclusions listed in §83.42 is "Transient occupancy in a hotel, condominium, motel, roominghouse, or similar public lodging, or transient occupancy in a mobile home park" (§83.42(3)). For that part, “Transient occupancy” means "occupancy when it is the intention of the parties that the occupancy will be temporary" (§83.43(18)). Whether a specific property may lawfully be rented short-term has to be verified for that property, with a Florida attorney.